Stock Market Today: Stocks higher on China tech rally; UnitedHealth slumps

U.S. stocks are on pace for a modest weekly gain but have lagged their global peers this year.

Feb 21, 2025 - 14:27

Stock Market Today: Stocks higher on China tech rally; UnitedHealth slumps

U.S. equity futures nudged higher in Friday trading, putting the S&P 500 on track to end the week in positive territory, amid a modest pullback in Treasury bond yields and solid gains for global stocks tied to a rally in China tech.

Updated at 7:29 AM EST

U.S. investigates UnitedHealth Medicare practices

UnitedHealth (UNH) shares tumbled in early trading following a report that the U.S. Department of Justice has launched a probe into the health insurance giant's Medicare Advantage practices.

The Wall Street Journal said the investigation would center on UnitedHealth's diagnosis recordings that trigger extra Medicare Advantage payments but aren't followed up with actual patient care.

Last year, a report from the Office of Inspector General for the Department of Health and Human Services said UnitedHealth and other Medicare Advantage insurers collected $7.5 billion in dubious payments in 2022. UnitedHealth took in $3.7 billion.

UnitedHealth shares were last marked 7.5% lower in premarket trading to indicate an opening-bell price of $463.50.

$UNH -7.65% [The U.S. Justice Department has launched an investigation into UnitedHealth's Medicare billing practices in recent months, according to the WSJ, citing people familiar with the matter.

The new civil fraud investigation is examining UnitedHealth's practices for…— NOTRELOAD AI (@thudderwicks) February 21, 2025

Stock Market Today

Stocks ended lower across the board last night, with the S&P 500 dragged lower by bank and retail stocks. The market move followed Walmart's (WMT) disappointing profit and sales outlook and a pullback in so-called momentum trade stocks tied to renewed tariff and inflation risks.

A grim reading for January housing starts as well underscored the impact that pending tariffs on goods from Canada and Mexico are likely to have on the broader economy.

The benchmark reading helped Treasury yields pare gains despite the linger inflation concerns echoed in hawkish minutes from the Federal Reserve's policy meeting earlier in the week.

Benchmark 10-year Treasury notes slipped under 4.5% in overnight trading, while 2-year notes eased to 4.262%, helping stock futures ride the wave of overseas gains into the final trading day of the week.

Tech giant Alibaba, the Amazon of Asia, has ignited a huge rally in China stocks.

Hong-Kong-listed shares of China-based tech companies closed out their strongest week of gains in five years, and the best single-day advance since October. The advance followed Alibaba's (BABA) better-than-expected fourth quarter earnings and ongoing bullishness from DeepSeek's late-January emergence.

Reports also suggest the GameStop (GME) CEO and billionaire investor Ryan Cohen has taken a $1 billion in Alibaba, a move that could validate the bullish China tech thesis.

"We do not believe Cohen is alone in his bets on Alibaba as it's becoming clearer this could be one of the winners in the China AI Arms Race," said Wedbush analyst Dan Ives.

"Clearly the US/China trade tensions abound, but investors like Cohen are looking past this and trying to make bets on Alibaba and the China tech market, a smart move in our view."

The gains helped the regional MSCI ex-Japan benchmark to a 1.34% advance, taking the benchmark to its highest levels in three months and extending its longest weekly winning streak in two years.

European stocks were also on the move, with the regional Stoxx 600 benchmark rising 0.38% in early Frankfurt trading heading into Sunday's federal elections in Germany.

More Wall Street Analysis:

Analysts are expecting a solid win for a conservative coalition led by Christian Democrat Friedrich Merz, with investors likely focused on the rise of the far-right and anti-European AfD party in Sunday's poll.

Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which is up 1.72% for the month, are priced for a 4-point opening-bell gain.

Futures linked to the Dow Jones Industrial Average, meanwhile, suggest a 57-point bump while the tech-focused Nasdaq is called 40 points higher.